« Florida Dems to Sue DNC over Ruling |
Blog Home Page
| Saudi Cleric Issues Edict Against Foreign Jihad »
October 4, 2007
Jobless Claims Rise in September
Rick Moran
Anticipating the Labor Department's employment numbers due out tomorrow, a report on jobless claims today showed a rise of 16,000 to 317,000 for the month of September. This is a higher number than expected and had stocks opening mixed in trading this morning:Weaker economic data bolsters the case for further rate cuts by the Federal Reserve, which lowered rates in September for the first time in four years.
But the jobless claims report also precedes the department's much-anticipated September employment report on Friday, and Wall Street is crossing its fingers for a rebound. A strong job market has been an important prop for the U.S. economy, helping to offset investor concerns over a housing slump and sluggish growth.
August's job creation report was a major disappointment, showing a decline in payrolls when economists had forecast moderate growth. The data shocked Wall Street and sent the Dow Jones industrial average down nearly 250 points on Sept. 7. Some are optimistic that the September report could be better than expected and include revisions to August's dismal numbers. While it is true that weaker job numbers could cause the Fed to lower rates, with the dollar in free fall against key currencies, the Fed may be reluctant to cut the rate very much at all. Another big sell off of dollars may start causing problems in the domestic economy which could lead to a vicious circle of the Fed cutting rates to goose the economy which would in turn make the dollar even more unattractive overseas.
Meanwhile, another report from the Commerce Department shows factory orders hitting a seven month low in August. Orders fell 3.3% which was considerably larger than the expected 2.8% and the biggest drop since January's 4.2%.
All this points to a slowing (but not slow) economy. Encouraging signs that the federal deficit will be much smaller this year than anticipated along with continued consumer confidence and a decent retail sales month expected for September all point to the probability that rather than landing in a recession, the US economy will make a soft landing with the prospects for higher growth sometime next year.
|
|
|
Share
